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12017 third quarter resultsPrepared remarksAugust 8, 2017Prepared RemarksNuance Third Quarter Fiscal 2017Nuance is providing these prepared remarks, in combination with its press release, to allow shareholders andanalysts additional time and detail for analyzing our results in advance of our quarterly conference call.These prepared remarks will not be read on the call.The conference call will begin at 5:00 p.m. ET today and will include only brief opening comments followed byquestions and answers. To access the live broadcast, please visit the Investor Relations section of Nuance’swebsite at http://investors.nuance.com. The call can also be heard by dialing 800-230-1092 or 612-234-9959at least five minutes prior to the call and referencing code 426362. A replay will be available within 24 hoursof the announcement by dialing 800-475-6701 or 320-365-3844 and using the access code 426362.Please see the section, “Discussion of Non-GAAP Financial Measures,” later in this document for moredetails on our non-GAAP financial measures.Summary of Business and Financial TrendsWe saw strong execution across our divisions in the third quarter, absent the June 27, 2017 malware incident,driven by net new bookings, recurring revenue, and cash flow from operations. This performance was led bycontinued strength in our Enterprise omni-channel offerings, Dragon Medical cloud solution, voice biometricssolutions, and our automotive business. We remain confident that the positive trends of the past four quarterswill provide the foundation for sustainable long-term organic growth in fiscal 2018 after the majority of themalware incident effects are behind us.As Reported Q3 17 ResultsWe reported GAAP revenue of 486.2 million for the third quarter, compared to 477.9 million a year ago.Third quarter non-GAAP revenue was 495.6 million, which includes revenue lost to accounting treatment inconjunction with acquisitions, compared to 484.9 million in the third quarter of fiscal 2016. Total recurringrevenue for the third quarter represented 73% of total GAAP revenue. On a non-GAAP basis, total recurringrevenue represented 73% of total non-GAAP revenue, compared to 71% a year ago. We reported net newbookings for the third quarter of 438.5 million, up 21% from 362.9 million a year ago.We reported GAAP net loss of (27.8) million for the third quarter, or (0.10) per share, compared to GAAPnet loss of (11.8) million, or (0.04) per share, in the third quarter of fiscal 2016. Non-GAAP net income was 79.2 million, or 0.27 per diluted share, down from non-GAAP net income of 83.3 million, or 0.30 perdiluted share, in the third quarter of fiscal 2016. Our GAAP operating margin for the quarter was 2.9%, downfrom 6.0% in the third quarter of fiscal 2016. Third quarter non-GAAP operating margin was 27.0%, downfrom 27.2% in the third quarter of fiscal 2016. Cash flow from operations was 132.0 million in the thirdquarter of fiscal 2017, up from 125.9 million in the third quarter of fiscal 2016. 2017 Nuance Communications, Inc. All rights reserved.

22017 third quarter resultsPrepared remarksAugust 8, 2017Pro Forma Q3 17 ResultsTo aid the investment community in assessing the impact of the malware incident, we are providing certaincommentary and financial metrics on a pro forma basis as if the malware incident had not occurred, as shownbelow: Net new bookings in the quarter of 448.7 million, up 24% compared to Q3 16; Organic non-GAAP revenue growth of 2% on a year-over-year basis; GAAP revenue of 501.6 million and non-GAAP revenue of 511.0 million; Recurring revenue at 73% of total GAAP and non-GAAP revenue, an increase of 200 basis points fromQ3 16; GAAP operating margin of 6.3% and non-GAAP operating margin of 28.9%; GAAP diluted EPS of (0.04) and non-GAAP diluted EPS of 0.30; under our new effective taxmethodology; and, Cash Flow from Operations (CFFO) for Q3 17 of 132.0 million, with CFFO representing 151% of nonGAAP net income, under our new effective tax methodology.We delivered strong net new bookings on a pro forma basis driven by our growth businesses, specificallyEnterprise, where we had significant wins, including a record voice biometrics deal with a large global financialinstitution. Additionally, we saw strength in our Enterprise omni-channel offerings, Dragon Medical cloud, andautomotive.On a pro forma basis, Q3 17 was our second consecutive quarter of organic non-GAAP revenue growth,reflecting strength in Enterprise omni-channel, automotive, and Dragon Medical cloud. Also, on a pro formabasis we met our GAAP and non-GAAP revenue guidance ranges, and both metrics were up 5% on a year-overyear basis as Q3 17 marked the first quarter where Dragon Medical cloud growth outpaced HIM transcriptiondeclines.We remained on target for our FY 17 margin goal, on a pro forma basis, with an increase in operating margins,as a result of increased revenues while maintaining our cost discipline. Additionally, on a pro forma basis wemet the high end of our GAAP and non-GAAP EPS guidance ranges and were flat on a year-over-year basis. 2017 Nuance Communications, Inc. All rights reserved.

32017 third quarter resultsPrepared remarksAugust 8, 2017Table: As Reported, Incident Impact, and Pro FormaQ32017AsreportedNet new bookingsEstimated 3-Year Value of Total OnDemand ContractsGAAP revenueQ32017ProForma 438.5 (10.2) 448.7 2,359.5 (240.2) 2,599.7 486.2 (15.4) 501.6GAAP Recurring revenue % of revenueGAAP gross .9%(3.4)%6.3%GAAP EPS (0.10) (0.06) (0.04)Non-GAAP revenue 495.6 (15.4) 511.0GAAP operating marginNon-GAAP Recurring revenue % ofrevenue73%73%Non-GAAP gross margin61.5%(0.8)%62.3%Non-GAAP operating margin27.0%(1.9)%28.9%Non-GAAP EPS 0.27 (0.03) 0.30CFFO as a % of Non-GAAP Net Income167%16%151%*Represents the incident impact included in our as reported resultsKey Financial Results for Third Quarter 2017The following discussion shows key financial results on an as reported basis. These results include the impact ofthe malware incident.Net New Bookings We delivered net new bookings in Q3 17 of 438.5 million, up 21% year-over-year. This growth wasled by Enterprise, which had its best quarter since we began reporting net new bookings, and 2017 Nuance Communications, Inc. All rights reserved.

42017 third quarter resultsPrepared remarksAugust 8, 2017specifically by our voice biometrics and omni-channel offerings. Additionally, we continued to seestrong bookings for our Dragon Medical cloud solution and automotive business.Table: Net New BookingsNet NewBookings(in 7Q32017 308.7 313.7 362.9 516.9 1,502.3 380.3 410.4 438.5Revenue In Q3 17, we achieved GAAP revenue of 486.2 million, up 2% from a year ago. Non-GAAP revenuewas 495.6 million, up 2% from a year ago, and down 1% on an organic basis. Our year-over-yearperformance reflects growth across offerings in our Enterprise segment, Dragon Medical cloud,automotive, mobile operator services, and core Imaging. These areas of growth were offset bycontinued declines in HIM transcription related to expected levels of erosion, as well as lowerrevenues due to the malware incident.Transition to Recurring Revenue In Q3 17, GAAP recurring revenue was 354.5 million, compared to 339.7 million a year ago.Non-GAAP recurring revenue was 363.2 million compared to 345.0 million a year ago. GAAPand non-GAAP recurring revenue increased to 73% in Q3 17 compared to 71% in Q3 16. 2017 Nuance Communications, Inc. All rights reserved.

52017 third quarter resultsPrepared remarksAugust 8, 2017Table: Non-GAAP Revenue by Type and as % of Total Non-GAAP Revenue*Q12016Hosting.% of Revenue.Maintenance and Support.% of Revenue.Perpetual Product and Licensing.% of Revenue.Recurring Product and Licensing.% of Revenue.Professional Services.% of Revenue.Total revenue.Total Recurring Revenue *.% of Revenue.Q22016Q32016Q42016FY2016Q12017Q22017Q32017 179.7 187.1 183.2 189.3 739.2 195.6 204.8 192.536%38%38%37%37%39%40%39% 80.2 80.0 82.5 82.0 324.7 82.7 82.0 80.716%16%17%16%16%17%16%16% 117.2 90.2 82.3 100.5 390.2 79.3 77.0 74.424%19%17%20%20%16%15%15% 67.9 74.1 75.3 81.7 299.1 78.2 90.6 85.814%15%16%16%15%16%18%17% 50.0 55.9 61.5 58.9 226.3 60.3 56.7 62.210%11%13%11%11%12%11%13% 494.9 487.4 484.9 512.4 1,979.6 496.0 511.1 495.6 332.5 345.8 345.0 357.1 1,380.3 360.5 381.7 363.267%71%71%70%70%73%75%73%* Total non-GAAP recurring revenue is the sum of recurring product and licensing, hosting, and maintenance and supportrevenue as well as the portion of non-GAAP professional services revenue delivered under ongoing subscriptioncontracts. Non-GAAP recurring product and licensing revenue comprises term-based and ratable licenses as well asrevenue from royalty arrangements. At the end of the quarter, the Estimated 3-Year Value of Total On-Demand Contracts was 2,359.5million, up from 2,161.1 million a year ago. The sequential quarterly decline from Q2 17 to Q3 17 of 208.8 million was primarily driven by the 200.1 million estimated decline of 3 year HIM transcriptionrevenue expectations resulting primarily from the malware incident, offset by growth in DragonMedical cloud expectations.Table: Estimated On-Demand Contract ValuesEstimated 3-Year Value of Total OnDemand Contracts (in 7 2,245.3 2,161.3 2,161.1 2,430.0 2,499.4 2,568.3 2,359.5 2017 Nuance Communications, Inc. All rights reserved.

62017 third quarter resultsPrepared remarksAugust 8, 2017Gross Margin GAAP gross margin in Q3 17 was 55.5%, a decrease of 100 basis points year-over-year. Q3 17 nonGAAP gross margin was 61.5%, a decrease of 50 basis points year-over-year. The reductions inboth GAAP and non-GAAP gross margins were a result of the lost revenues from the malwareincident.Operating Expenses and Operating Margin Q3 17 GAAP operating expenses were 255.7 million, compared to 241.3 million a year ago. GAAPoperating margin was 2.9%, a decrease of 310 basis points year-over-year. Q3 17 non-GAAPoperating expenses were 170.9 million, compared to 168.8 million a year ago. Q3 17 non-GAAPoperating margin was 27.0%, a decrease of 20 basis points year-over-year as a result of the lostrevenues from the malware incident.Interest Expense GAAP net interest expense was 38.5 million in Q3 17, up 6.3 million year-over-year. Non-GAAPnet cash interest expense was 22.3 million in Q3 17, up 3.0 million year-over-year. The increase innon-GAAP net cash interest expense in Q3 17 is primarily a result of capital market activities,including the issuance in December 2016 of 500 million in senior 5.625% notes and the issuance inMarch 2017 of 350 million in 1.25% convertible notes, offset by the impact of the retirement of 600million of our high-yield 5.375% bonds in January 2017.Provision for Income Taxes Q3 17 GAAP provision for income taxes was 2.6 million, compared to 7.8 million a year ago. Q3 17 non-GAAP provision for income taxes was 31.3 million, compared to 29.6 million a year ago.The non-GAAP tax rate under the new method was 28.4% in Q3 17, compared to 26.2% a year ago.The increase in the non-GAAP income tax rate on a year-over-year basis was mainly due to thehigher level of pre-tax income being generated in the United States.Earnings Performance GAAP EPS in Q3 17 was (0.10) per share, compared to (0.04) a year ago. In Q3 17, non-GAAPEPS was 0.27, down 0.03 from a year ago as a result of the lost revenues due to the malwareincident. During Q3 17, we did not repurchase any shares of our common stock. As of June 30, 2017, we hadapproximately 193.4 million remaining under the Board’s repurchase program authorization. 2017 Nuance Communications, Inc. All rights reserved.